Anger as £1bn earmarked for cleaner energy goes to ‘different projects’

THE £1 billion that had been earmarked for carbon-capture-and-storage (CCS) technology will be spent on other projects, the UK government has announced.

A row blew up yesterday after Chief Treasury Secretary Danny Alexander said the money had been put on hold and the funds would be used for other spending instead.

His decision came after the Longannet CCS project, to take away pollution from traditional fossil-fuel power plants, fell through.

Longannet’s downfall had looked like being good news for Peterhead, where a project based around a former oil field seemed to be emerging as the only contender for the money.

Energy Secretary Chris Huhne appeared to signal he wanted to continue with the £1bn competition when he gave the annual energy statement to parliament last week.

He said: “I can certainly confirm that there is absolutely no backsliding on the money available for carbon capture and storage. The Treasury will confirm that there is £1bn available to support CCS, and we are looking to do that in the most effective way possible so that we can ensure that the industry is rolled out.”

But yesterday, fellow Liberal Democrat Mr Alexander said: “We’re launching a new competition to provide £1bn for CCS, but that competition, obviously, is going to take longer, so much of the money that we’d allocated to spend in this parliament we’ve now reallocated to different sorts of projects.”

Opponents said Mr Alexander was threatening the UK’s competitive edge and thousands of potential jobs in Scotland.

Labour’s shadow energy minister Tom Greatrex called on the government to halt its planned raid on CCS funding. He said: “With no consultation with the industry, Danny Alexander has at a stroke ruled out any meaningful progress on the CCS project at Peterhead in this parliament. Once again, the dead hand of the Treasury has stalled this process.”

SNP finance secretary John Swinney said: “This raises more questions and concerns about the UK government’s motivations for scuppering the Longannet project. We need to know UK ministers’ exact intentions in regard to their plans for these funds, because information on the selection process for the next phase of the competition is seriously lacking.”